SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. )*
Preferred Networks, Inc.
(Name of Issuer)
Common Stock, par value $.0001 per share
(Title of Class of Securities)
73990510
(CUSIP Number)
Thomas R. Stephens, Esq.
Bartlit Beck Herman Palenchar & Scott
511 Sixteenth Street Suite 700
Denver, Colorado 80202
(303) 592-3100
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
April 9, 1997
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box [ ].
Note: Six copies of this statement, including all exhibits, should be filed
with the Commission. See Rule 13d-1(a) for other parties to whom copies are to
be sent.
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
(Continued on following page(s))
Page 1 of 54 Pages
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Centennial Fund IV, L.P.
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) X
(b)
3 SEC USE ONLY
4 SOURCE OF FUNDS*
WC
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(D) OR 2(E)
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
NUMBER OF 7 SOLE VOTING POWER
SHARES 1,057,502
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY 0
EACH 9 SOLE DISPOSITIVE POWER
REPORTING 1,057,502
PERSON 10 SHARED DISPOSITIVE POWER
WITH 0
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,057,502
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
X
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
6.5%
14 TYPE OF REPORTING PERSON*
PN
* SEE INSTRUCTIONS BEFORE FILLING OUT!
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Centennial Holdings IV, L.P.
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) X
(b)
3 SEC USE ONLY
4 SOURCE OF FUNDS*
Not applicable
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(D) OR 2(E)
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
NUMBER OF 7 SOLE VOTING POWER
SHARES 1,057,502
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY 0
EACH 9 SOLE DISPOSITIVE POWER
REPORTING 1,057,502
PERSON 10 SHARED DISPOSITIVE POWER
WITH 0
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,057,502
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
X
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
6.5%
14 TYPE OF REPORTING PERSON*
PN
* SEE INSTRUCTIONS BEFORE FILLING OUT!
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Fleet Equity Partners VI, L.P.
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) X
(b)
3 SEC USE ONLY
4 SOURCE OF FUNDS*
WC
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(D) OR 2(E)
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
NUMBER OF 7 SOLE VOTING POWER
SHARES 0
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY 271,049
EACH 9 SOLE DISPOSITIVE POWER
REPORTING 0
PERSON 10 SHARED DISPOSITIVE POWER
WITH 271,049
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
271,049
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
X
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
1.7%
14 TYPE OF REPORTING PERSON*
PN
* SEE INSTRUCTIONS BEFORE FILLING OUT!
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Fleet Growth Resources, II, Inc.
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) X
(b)
3 SEC USE ONLY
4 SOURCE OF FUNDS*
Not applicable
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(D) OR 2(E) X
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
NUMBER OF 7 SOLE VOTING POWER
SHARES 0
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY 271,049
EACH 9 SOLE DISPOSITIVE POWER
REPORTING 0
PERSON 10 SHARED DISPOSITIVE POWER
WITH 271,049
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
271,049
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
X
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
1.7%
14 TYPE OF REPORTING PERSON*
CO
* SEE INSTRUCTIONS BEFORE FILLING OUT!
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Fleet Growth Resources, Inc.
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) X
(b)
3 SEC USE ONLY
4 SOURCE OF FUNDS*
Not applicable
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(D) OR 2(E)
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Rhode Island
NUMBER OF 7 SOLE VOTING POWER
SHARES 0
BENEFICIALLY 8 SHARED VOTING POWER
271,049
OWNED BY
EACH 9 SOLE DISPOSITIVE POWER
REPORTING 0
PERSON 10 SHARED DISPOSITIVE POWER
WITH 271,049
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
271,049
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
X
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
1.7%
14 TYPE OF REPORTING PERSON*
CO
* SEE INSTRUCTIONS BEFORE FILLING OUT!
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Fleet Venture Resources, Inc.
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) X
(b)
3 SEC USE ONLY
4 SOURCE OF FUNDS*
WC
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(D) OR 2(E)
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Rhode Island
NUMBER OF 7 SOLE VOTING POWER
SHARES 0
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY 632,450
EACH 9 SOLE DISPOSITIVE POWER
REPORTING 0
PERSON 10 SHARED DISPOSITIVE POWER
WITH 632,450
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
632,450
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
X
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
3.9%
14 TYPE OF REPORTING PERSON*
CO
* SEE INSTRUCTIONS BEFORE FILLING OUT!
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Fleet Private Equity Co, Inc.
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) X
(b)
3 SEC USE ONLY
4 SOURCE OF FUNDS*
Not applicable
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(D) OR 2(E)
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Rhode Island
NUMBER OF 7 SOLE VOTING POWER
SHARES 0
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY 903,499
EACH 9 SOLE DISPOSITIVE POWER
REPORTING 0
PERSON 10 SHARED DISPOSITIVE POWER
WITH 903,499
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
903,499
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
X
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
5.6%
14 TYPE OF REPORTING PERSON*
CO
* SEE INSTRUCTIONS BEFORE FILLING OUT!
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Fleet Financial Group, Inc.
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) X
(b)
3 SEC USE ONLY
4 SOURCE OF FUNDS*
Not applicable
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(D) OR 2(E)
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Rhode Island
NUMBER OF 7 SOLE VOTING POWER
SHARES 903,499
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY 0
EACH 9 SOLE DISPOSITIVE POWER
REPORTING 903,499
PERSON 10 SHARED DISPOSITIVE POWER
WITH 0
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
903,499
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
X
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
5.6%
14 TYPE OF REPORTING PERSON*
CO
* SEE INSTRUCTIONS BEFORE FILLING OUT!
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Silverado IV Corp.
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) X
(b)
3 SEC USE ONLY
4 SOURCE OF FUNDS*
Not applicable
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(D) OR 2(E)
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
NUMBER OF 7 SOLE VOTING POWER
SHARES 0
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY 271,049
EACH 9 SOLE DISPOSITIVE POWER
REPORTING 0
PERSON 10 SHARED DISPOSITIVE POWER
WITH 271,049
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
271,049
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
X
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
1.7%
14 TYPE OF REPORTING PERSON*
CO
* SEE INSTRUCTIONS BEFORE FILLING OUT!
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Chisholm Partners II, L.P.
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) X
(b)
3 SEC USE ONLY
4 SOURCE OF FUNDS*
WC
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(D) OR 2(E)
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
NUMBER OF 7 SOLE VOTING POWER
SHARES 0
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY 139,001
EACH 9 SOLE DISPOSITIVE POWER
REPORTING 0
PERSON 10 SHARED DISPOSITIVE POWER
WITH 139,001
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
139,001
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
X
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
0.9%
14 TYPE OF REPORTING PERSON*
PN
* SEE INSTRUCTIONS BEFORE FILLING OUT!
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Silverado II, L.P.
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) X
(b)
3 SEC USE ONLY
4 SOURCE OF FUNDS*
Not applicable
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(D) OR 2(E)
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
NUMBER OF 7 SOLE VOTING POWER
SHARES 0
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY 139,001
EACH 9 SOLE DISPOSITIVE POWER
REPORTING 0
PERSON 10 SHARED DISPOSITIVE POWER
WITH 139,001
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
139,001
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
X
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
0.9%
14 TYPE OF REPORTING PERSON*
PN
* SEE INSTRUCTIONS BEFORE FILLING OUT!
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Silverado II Corp.
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) X
(b)
3 SEC USE ONLY
4 SOURCE OF FUNDS*
Not applicable
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(D) OR 2(E)
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
NUMBER OF 7 SOLE VOTING POWER
SHARES 0
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY 139,001
EACH 9 SOLE DISPOSITIVE POWER
REPORTING 0
PERSON 10 SHARED DISPOSITIVE POWER
WITH 139,001
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
139,001
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
X
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
0.9%
14 TYPE OF REPORTING PERSON*
CO
* SEE INSTRUCTIONS BEFORE FILLING OUT!
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Robert M. Van Degna
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) X
(b)
3 SEC USE ONLY
4 SOURCE OF FUNDS*
Not applicable
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(D) OR 2(E)
6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States
NUMBER OF 7 SOLE VOTING POWER
SHARES 6,000
BENEFICIALLY 8 SHARED VOTING POWER
SHARES 1,042,500
OWNED BY
EACH 9 SOLE DISPOSITIVE POWER
REPORTING 6,000
PERSON 10 SHARED DISPOSITIVE POWER
WITH 1,042,500
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,048,500
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
X
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
6.5%
14 TYPE OF REPORTING PERSON*
IN
* SEE INSTRUCTIONS BEFORE FILLING OUT!
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Habib Y. Gorgi
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) X
(b)
3 SEC USE ONLY
4 SOURCE OF FUNDS*
Not applicable
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(D) OR 2(E)
6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States
NUMBER OF 7 SOLE VOTING POWER
SHARES 0
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY 1,042,500
EACH 9 SOLE DISPOSITIVE POWER
REPORTING 0
PERSON 10 SHARED DISPOSITIVE POWER
WITH 1,042,500
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,042,500
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
X
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
6.5%
14 TYPE OF REPORTING PERSON*
IN
* SEE INSTRUCTIONS BEFORE FILLING OUT!
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Saugatuck Capital Company Limited Partnership III
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) X
(b)
3 SEC USE ONLY
4 SOURCE OF FUNDS*
WC
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(D) OR 2(E)
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
NUMBER OF 7 SOLE VOTING POWER
SHARES 0
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY 1,042,502
EACH 9 SOLE DISPOSITIVE POWER
REPORTING 0
PERSON 10 SHARED DISPOSITIVE POWER
WITH 1,042,502
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,042,502
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
X
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
6.5%
14 TYPE OF REPORTING PERSON*
PN
* SEE INSTRUCTIONS BEFORE FILLING OUT!
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Greyrock Partners Limited Partnership
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) X
(b)
3 SEC USE ONLY
4 SOURCE OF FUNDS*
Not applicable
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(D) OR 2(E)
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
NUMBER OF 7 SOLE VOTING POWER
SHARES 0
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY 1,042,502
EACH 9 SOLE DISPOSITIVE POWER
REPORTING 0
PERSON 10 SHARED DISPOSITIVE POWER
WITH 1,042,502
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,042,502
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
X
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
6.5%
14 TYPE OF REPORTING PERSON*
PN
* SEE INSTRUCTIONS BEFORE FILLING OUT!
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
PNC Capital Corp.
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) X
(b)
3 SEC USE ONLY
4 SOURCE OF FUNDS*
WC
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(D) OR 2(E)
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
NUMBER OF 7 SOLE VOTING POWER
SHARES 416,997
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY 0
EACH 9 SOLE DISPOSITIVE POWER
REPORTING 416,997
PERSON 10 SHARED DISPOSITIVE POWER
WITH 0
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
416,997
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
X
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
2.6
14 TYPE OF REPORTING PERSON*
CO
* SEE INSTRUCTIONS BEFORE FILLING OUT!
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
PNC Holding Corp.
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) X
(b)
3 SEC USE ONLY
4 SOURCE OF FUNDS*
Not applicable
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(D) OR 2(E)
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
NUMBER OF 7 SOLE VOTING POWER
SHARES 416,997 SHARES
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY 0
EACH 9 SOLE DISPOSITIVE POWER
REPORTING 416,997
PERSON 10 SHARED DISPOSITIVE POWER
WITH 0
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
416,997
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
X
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
2.6%
14 TYPE OF REPORTING PERSON*
CO
* SEE INSTRUCTIONS BEFORE FILLING OUT!
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
PNC Bank Corp.
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) X
(b)
3 SEC USE ONLY
4 SOURCE OF FUNDS*
Not applicable
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(D) OR 2(E)
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Pennsylvania
NUMBER OF 7 SOLE VOTING POWER
SHARES 416,997
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY 0
EACH 9 SOLE DISPOSITIVE POWER
REPORTING 416,997
PERSON 10 SHARED DISPOSITIVE POWER
WITH 0
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
416,997
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
X
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
2.6%
14 TYPE OF REPORTING PERSON*
CO
* SEE INSTRUCTIONS BEFORE FILLING OUT!
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Primus Capital Fund III Limited Partnership
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) X
(b)
3 SEC USE ONLY
4 SOURCE OF FUNDS*
WC
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(D) OR 2(E)
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Ohio
NUMBER OF 7 SOLE VOTING POWER
SHARES 521,250
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY 0
EACH 9 SOLE DISPOSITIVE POWER
REPORTING 521,250
PERSON 10 SHARED DISPOSITIVE POWER
WITH 0
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
521,250
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
X
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
3.2%
14 TYPE OF REPORTING PERSON*
PN
* SEE INSTRUCTIONS BEFORE FILLING OUT!
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Primus Venture Partners III Limited Partnership
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) X
(b)
3 SEC USE ONLY
4 SOURCE OF FUNDS*
Not applicable
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(D) OR 2(E)
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Ohio
NUMBER OF 7 SOLE VOTING POWER
SHARES 521,250
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY 0
EACH 9 SOLE DISPOSITIVE POWER
REPORTING 521,250
PERSON 10 SHARED DISPOSITIVE POWER
WITH 0
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
521,250
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
X
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
3.2%
14 TYPE OF REPORTING PERSON*
PN
* SEE INSTRUCTIONS BEFORE FILLING OUT!
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Primus Venture Partners, Inc.
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) X
(b)
3 SEC USE ONLY
4 SOURCE OF FUNDS*
Not applicable
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(D) OR 2(E)
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Ohio
NUMBER OF 7 SOLE VOTING POWER
SHARES 521,250
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY 0
EACH 9 SOLE DISPOSITIVE POWER
REPORTING 521,250
PERSON 10 SHARED DISPOSITIVE POWER
WITH 0
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
521,250
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
X
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
3.2%
14 TYPE OF REPORTING PERSON*
CO
* SEE INSTRUCTIONS BEFORE FILLING OUT!
STATEMENT ON SCHEDULE 13D
Saugatuck Capital Company Limited Partnership III and Greyrock
Partners Limited Partnership previously filed a Statement on Schedule 13D in
connection with the securities of the Issuer. This Statement on Schedule 13D
shall constitute an amendment of such Statement.
Item 1. Security and Issuer.
This Statement relates to the Common Stock, par value $.0001 per
share (the "Shares") of Preferred Networks, Inc., a Delaware corporation (the
"Company"). The principal executive offices of the Company are located at 850
Center Way, Norcross, Georgia 30071.
Item 2. Identity and Background
(a) This Statement is filed by the following (collectively, the
"Reporting Persons"):
(i) by virtue of their direct beneficial ownership of Shares, by
each of Centennial Fund IV, L.P., a Delaware limited partnership
( Centennial IV ), Fleet Equity Partners VI, L.P., a Delaware limited
partnership ( FEP VI ), Fleet Venture Resources, Inc., a Rhode Island
Corporation ( FVR ), Chisholm Partners II, L.P., a Delaware limited
partnership ( CP ), Saugatuck Capital Company Limited Partnership III, a
Delaware limited partnership ( Saugatuck III ), PNC Capital Corp., a
Delaware corporation ( PNCCC ), and Primus Capital Fund III Limited
Partnership, an Ohio limited partnership ( Primus III ) (collectively, the
Stockholders ),
(ii) by virtue of being the sole general partner of Centennial IV,
by Centennial Holdings IV, L.P., a Delaware limited partnership ( Holdings
IV ),
(iii) by virtue of being the sole general partners of FEP VI, by
Fleet Growth Resources II, Inc., a Delaware corporation ( FGRII ) and
Silverado IV Corp., a Delaware corporation ( SCIV ),
(iv) by virtue of the ownership of all of the outstanding common
stock of FGRII, by Fleet Growth Resources, Inc., a Rhode Island
corporation ( FGR ),
(v) by virtue of the ownership of all of the outstanding common
stock of FGR and all of the outstanding common stock of FVR, by Fleet
Private Equity Co., a Rhode Island corporation ( FPEC )
(vi) by virtue of the ownership of all of the outstanding common
stock of FPEC, by Fleet Financial Group, Inc., a Rhode Island corporation
( FFGI ),
(vii) by virtue of being the sole general partner of CP, by
Silverado II, L.P., a Delaware limited partnership ( SLP ),
(viii) by virtue of being the sole general partner of SLP, by
Silverado II Corp., a Delaware corporation ( SCII ),
(ix) by virtue of their ownership of a majority of the outstanding
common stock of SCII and SCIV, and by virtue of their officer and director
positions and roles with FVR, FGR, FGRII, FPEC, SCII and SCIV, by Robert
M. Van Degna and Habib Y. Gorgi (Mr. Van Degna is also the direct
beneficial owner of Shares),
(x) by virtue of being the sole general partner of Saugatuck III, by
Greyrock Partners Limited Partnership, a Delaware limited partnership
( Greyrock ),
(xi) by virtue of being the sole general partner of Primus III, by
Primus Venture Partners III Limited Partnership ( Primus Venture III ), an
Ohio limited partnership,
(xii) by virtue of being the sole general partner of Primus Venture
III, by Primus Venture Partners, Inc. ( Primus ), an Ohio corporation,
(xiii) by virtue of the ownership of all of the outstanding common
stock of PNCCC, by PNC Holding Corp., a Delaware corporation ( PNCHC ) and
(xiv) by virtue of the ownership of all of the outstanding common
stock of PNCHC, by PNC Bank Corp., a Pennsylvania corporation ( PNCBC ).
By signing this Statement, each Reporting Person agrees that this
Statement is filed on its behalf. No Reporting Person assumes responsibility
for the completeness or accuracy of the information concerning any other
Reporting Person.
Steven C. Halstedt, G. Jackson Tankersley, Jr., Jeffrey H. Schutz,
Adam Goldman, Donald H. Parsons, Jr., and David C. Hull, Jr. are the sole
general partners of Holdings IV (the Centennial Partners ). By virtue of the
relationships described above and their roles with Centennial IV and Holdings
IV, each of the Centennial Partners may be deemed to control Holdings IV and
Centennial IV and may be deemed to possess indirect beneficial ownership of the
Shares held by Centennial IV. However, none of the Centennial Partners, acting
alone, has voting or investment power with respect to the Shares directly
beneficially held by Centennial IV, and, as a result, each Centennial Partner
disclaims beneficial ownership of the Shares directly beneficially owned by
Centennial IV.
Certain information concerning the executive officers and directors
of FGRII, FGR, FVR, FPEC, FFGI, SCII and SCIV (collectively, the Fleet
Directors and Officers ) is set forth on Schedule A attached hereto, which is
incorporated herein by this reference.
Frank J. Hawley, Jr., Christy S. Sadler, Owen S. Crihfield, Richard
P. Campbell, Jr., and Barbara E. Parker (collectively, the Saugatuck Partners )
are each general partners of Greyrock. However, none of the Saugatuck Partners,
acting alone, has voting or investment power with respect to the Shares directly
beneficially held by Saugatuck III, and, as a result, each Saugatuck Partner
disclaims beneficial ownership of the Shares directly beneficially owned by
Saugatuck III.
James T. Bartlett, Jonathan E. Dick, Kevin J. McGinty, William C.
Mulligan, Steven Rothman and Loyal Wilson (collectively, the Primus Officers )
are each Managing Directors of Primus and limited partners of Primus Venture
III. The Primus Officers other than Mr. Rothman are also shareholders of
Primus.
Certain information concerning the executive officers and directors
of PNCCC, PNCHC and PNCBC (collectively, the PNC Directors and Officers ) is
set forth on Schedule B attached hereto, which is incorporated herein by this
reference.
For purposes of this Statement, the Centennial Partners, the Fleet
Directors and Officers, the Saugatuck Partners, the Primus Officers, and the PNC
Officers and Directors are collectively referred to as the Officers and
Partners.
(b) The principal executive offices of Centennial IV and Holdings
IV, and the business address of each Centennial Partner, are located at 1428
Fifteenth Street, Denver, Colorado 80202-1318.
The principal business address of each of FEP VI, FGRII, FGR, FVR,
FPEC, CP, SLP, SCII, SCIV and Messrs. Van Degna and Gorgi is 50 Kennedy Plaza,
Providence, Rhode Island 02903. The principal business address of FFGI is 1
Federal Street, Boston, Massachusetts 02110.
The principal executive offices of Saugatuck III and Greyrock, and
the business address of each Saugatuck Officer, are One Canterbury Green,
Stamford, Connecticut 06901.
The principal executive offices of Primus III, Primus Venture III
and Primus, and the business address of each Primus Officer, are located at 1375
E. Ninth Street, Suite 2700, Cleveland, Ohio 44114.
The principal executive offices of PNCCC and PNCHC and the business
address of each PNCCC and PNCHC officer are c/o PNC Bank, Delaware, 222 Delaware
Avenue, Wilmington, Delaware 19801. The principal executive offices of PNCBC
and the business address of each PNCBC officer are One PNC Plaza, 249 Fifth
Avenue, Pittsburgh, Pennsylvania 15222-2707.
(c) Centennial IV is a venture capital investment partnership.
Holdings IV s principal business is acting as the general partner of Centennial
IV. Each of the Centennial Partners is a general partner of each of Holdings IV
and Centennial Holdings V, L.P., which is engaged in the business of acting as a
general partner to a venture capital investment partnership.
The principal business of each of FEP VI, FGRII, FGR, FVR, FPEC, CP,
SLP, SCII and SCIV is making and managing private equity investments, and, in
the case of FGRII and SCIV, acting as the general partners of FEP VI, in the
case of SLP, acting as the general partner of CP, in the case of SCII, acting as
the general partner of SLP. FFGI is principally engaged in the business of
providing diversified financial services, including services relating to
commercial banking, consumer banking, investment services, asset collection and
management services to its subsidiaries, financial institutions and
individuals.
Mr. Van Degna is Chairman and CEO of each of FPEC, FVR, FGR and FGRII, and
Chairman, CEO and Treasurer of SCII and SCIV. Mr. Gorgi is President o FPEC,
FVR, FGR and FGRII, and President and Secretary of SCII and SCIV.
Saugatuck III and Greyrock are engaged in the venture capital
business. Each of the Saugatuck Partners is an executive officer of Saugatuck
Associates, Inc. ( SA ), which is engaged in venture capital financing, and
holds various other positions with companies affiliated with SA.
Primus III is a venture capital investment partnership. Primus
Venture III s principal business is acting as the general partner of Primus
III.
Primus principal business is acting as the general partner of Primus Venture
III. Each of the Primus Officers is a Managing Director of Primus.
PNCCC is a venture capital investment corporation. PNCHC acts as a
holding company for certain non-bank indirect subsidiaries of PNCBC. PNCBC is
principally engaged in the business of providing diversified financial services,
including services relating to commercial banking, consumer banking, investment
services, asset collection and management services to its subsidiaries,
financial institutions and individuals.
(d) None of the Reporting Persons or, to the knowledge of the
Reporting Persons, any of the Officers and Partners, has been convicted in a
criminal proceeding in the past five years (excluding traffic violations or
similar misdemeanors).
(e) During the past five years, none of the Reporting Persons or,
to the knowledge of the Reporting Persons, any of the Officers and Partners, was
a party to a civil proceeding of a judicial or administrative body of competent
jurisdiction as a result of which such person was or is subject to a judgment,
decree or final order enjoining future violations of, or prohibiting or
mandating activities subject to, federal or state securities laws of finding any
violation with respect to such laws.
(f) Centennial IV, Holdings IV, FEP VI, CP, SLP, Saugatuck III and
Greyrock are Delaware limited partnerships. FGRII, SCII, SCIV, PNCCC and
PNCHC are Delaware corporations. FGR, FVR, FPEC and FFGI are Rhode Island
corporations. PNCBC is a Pennsylvania corporation. Primus III and Primus
Venture III are Ohio limited partnerships. Primus is an Ohio corporation. Each
of Messrs. Van Degna and Gorgi and the Officers and Partners is a citizen of the
United States.
Item 3. Source and Amount of Funds or Other Consideration
The total amount of funds required by Centennial IV to acquire the
Shares reported in Item 5(a) was $3,332,399, and the total amount of funds
required by Centennial IV to make the Investment described in Item 4 will be
$4,700,000. Such funds were or will be provided by Centennial IV s capital
available for investment.
The total amount of funds required by FEP VI to acquire the Shares
reported in Item 5(a) was $849,070, and the total amount of funds required by
FEP VI to make the Investment described in Item 4 will be $1,503,000. Such
funds were or will be provided by FEP VI s capital available for investment.
The total amount of funds required by FVR to acquire the Shares
reported in Item 5(a) was $1,981,174, and the total amount of funds required by
FVR to make the Investment described in Item 4 will be $3,507,000. Such funds
were or will be provided by FVR s capital available for investment.
The total amount of funds required by CP to acquire the Shares
reported in Item 5(a) was $435,423, and the total amount of funds required by CP
to make the Investment described in Item 4 will be $90,000. Such funds were or
will be provided by CP s capital available for investment.
The total amount of funds required by Saugatuck III to acquire the
Shares reported in Item 5(a) was $3,331,345, and the total amount of funds
required by Saugatuck III to make the Investment described in Item 4 will be
$1,800,000. The source of such funds was or will be capital obtained from
private investors.
The total amount of funds required by Primus III to acquire the
Shares reported in Item 5(a) was $1,657,905, and the total amount of funds
required by Primus III to make the Investment described in Item 4 will be
$1,700,000. Such funds were or will be provided by Primus III s capital
available for investment.
The total amount of funds required by PNCCC to acquire the Shares
reported in Item 5(a) was $1,212,113, and the total amount of funds required by
PNCCC to make the Investment described in Item 4 will be $1,700,000. Such funds
were or will be provided by PNCCC s capital available for investment.
The Reporting Persons understand that the restricted Shares held by
Jeffrey Schutz and Robert Van Degna, as reported in Item 5(a), were acquired by
such persons in consideration of their service as directors of the Company. The
Reporting Persons understand that the total amount of funds required by Kevin
McGinty and James T. Bartlett to acquire the Shares reported in Item 5(a) was
$30,000 and $20,000, respectively. The source of such funds was such person s
personal investment funds. <PAGE>
Item 4. Purpose of Transaction
Each of the Stockholders holds the Shares described in Item 5 of
this Statement for investment only. Depending upon their evaluation of the
Company's investments and prospects, and upon future developments (including,
but not limited to, performance of the Shares in the market, the effective yield
on the Shares, availability of funds, alternative uses of funds, and money,
stock market and general economic conditions), each of the Stockholders may from
time to time purchase Shares, dispose of all or a portion of the Shares it
holds, or cease buying or selling Shares. Any such additional purchases or
sales of the Shares may be in open market or privately-negotiated transactions
or otherwise.
Jeffrey Schutz and Robert Van Degna are directors of the Company.
The Reporting Persons understand they acquired the Shares reported in Item 5(a)
as held by each or Messrs. Schutz, Van Degna, McGinty and Bartlett are held for
investment purposes only.
On April 9, 1997, the Stockholders committed, pursuant to the term
sheet attached as Exhibit 1 (the Term Sheet ), to invest an aggregate of $15
million in newly issued Class A Preferred Stock and warrants of the Company (the
Investment ). On April 9, 1997, the Company accepted such commitment. The
funds from the Investment are to be used by the Company for capital expenditures
related to the Company s network buildout and for general corporate purposes.
The Term Sheet provides that the holders of the Class A Preferred Stock will be
entitled to elect one director other than Messrs. Schutz and Van Degna. In
connection with the Investment, the Stockholders agreed to make a bridge loan to
the Company of up to $10,000,000 on or before April 25, 1997, which loan will
bear interest at an annual rate of 10% and will be due June 30, 1997 or upon the
closing of the Investment. The Investment is subject to a number of conditions,
including without limitation the negotiation of definitive documents to evidence
the Investment and approval by the Company s shareholders of certain
transactions contemplated by the Investment, and no assurances can be given that
the Investment will be closed or that the terms and conditions of the Investment
will not change. The foregoing summary of the Term Sheet is qualified in its
entirety by reference to the text of the Term Sheet attached as Exhibit 1 to
this Statement.
Except as described in this Item 4, none of the Reporting Persons
nor any of the Officers and Partners has formulated any plans or proposals which
relate to or would result in any matter required to be disclosed in response to
paragraphs (a) through (j) of Item 4 of Schedule 13D.
Item 5. Interest in Securities of the Issuer.
(a) Centennial IV is the direct beneficial owner of 1,042,502
Shares, or approximately 6.5% of the 16,080,559 Shares deemed outstanding as of
April 7, 1997 according to information contained in the Company s Annual Report
on Form 10-K for the year ended December 31, 1996 (the Form 10-K )). By virtue
of the relationships reported under Item 2 of this Statement, Holdings IV may be
deemed to have indirect beneficial ownership of the Shares directly beneficially
owned by Centennial IV.
In addition to the Shares directly held by Centennial IV as
identified above, Jeffrey Schutz holds 15,000 restricted Shares, or less than 1%
of the Outstanding Shares. Such Shares are held on behalf of Centennial IV.
Such Shares are subject to certain vesting restrictions and were issued to Mr.
Schutz in connection with his services to the Company as a director. Mr. Schutz
disclaims beneficial ownership of such Shares, and Centennial IV and Holdings IV
may be deemed to have indirect beneficial ownership of such Shares.
FEP VI is the direct beneficial owner of 271,049 Shares, or
approximately 1.7% of the Outstanding Shares. By virtue of the relationships
reported under Item 2 of this Statement, FGRII, FGR, FPEC, FFGI, SCIV and
Messrs. Van Degna and Gorgi may be deemed to share indirect beneficial ownership
of the Shares directly beneficially owned by FEP VI. Messrs. Van Degna and
Gorgi disclaim beneficial ownership of the shares not held directly by them.
FVR is the direct beneficial owner of 632,450 Shares, or
approximately 3.9% of the Outstanding Shares. By virtue of the relationship
reported under Item 2 of this Statement, FPEC, FFGI and Messrs. Van Degna and
Gorgi may be deemed to share indirect beneficial ownership of the Shares
directly beneficially owned by FVR. Messrs. Van Degna and Gorgi disclaim
beneficial ownership of the shares not held directly by them.
CP is the direct beneficial owner of 139,001 Shares, or
approximately 0.9% of the Outstanding Shares. By virtue of the relationship
reported under Item 2 of this Statement, SLP, SCII and Messrs. Van Degna and
Gorgi may be deemed to share indirect beneficial ownership of the Shares
directly beneficially owned by CP. Messrs. Van Degna and Gorgi disclaim
beneficial ownership of the shares not held directly by them.
Robert Van Degna is the direct beneficial owner of 6,000 restricted
Shares, or less than 1% of the Outstanding Shares. Mr. Van Degna has been
granted other Shares which are subject to certain vesting restrictions and were
issued to him in connection with his services as a director of the Company.
Saugatuck III is the direct beneficial owner of 1,042,502 Shares, or
approximately 6.5% of the Outstanding Shares. By virtue of the relationships
reported under Item 2 of this Statement, Greyrock may be deemed to have indirect
beneficial ownership of the Shares directly beneficially owned by Saugatuck III.
Primus III is the direct beneficial owner of 521,250 Shares, or
approximately 3.2% of the Outstanding Shares. By virtue of the relationships
reported under Item 2 of this Statement, Primus Venture III and Primus may be
deemed to have indirect beneficial ownership of the Shares directly beneficially
owned by Primus III.
PNCCC is the direct beneficial owner of 416,997 Shares, or
approximately 2.6% of the Outstanding Shares. By virtue of the relationships
reported under Item 2 of this Statement, PNCHC and PNCBC may be deemed to have
indirect beneficial ownership of the Shares directly beneficially owned by
PNCCC.
The information included in the third paragraph under Item 4 of this
Statement is hereby incorporated in its entirety by this reference. By virtue
of the arrangements described in Item 4, the Stockholders may be deemed to
constitute a group formed for the purpose of making the Investment. Except as
specifically set forth in this Item 5(a), each of the Reporting Persons
disclaims beneficial ownership of Shares held by the other Reporting Persons.
The Reporting Persons understand Kevin McGinty is the direct
beneficial owner of 3,000 Shares, or less than 1% of the Outstanding Shares, and
that James T. Bartlett is the direct beneficial owner of 2,000 Shares, or less
than 1% of the Outstanding Shares.
(b) Centennial IV has the direct power to direct the disposition
of and vote the Shares held by it. By virtue of the relationships described in
Item 2, Holdings IV may be deemed to have the indirect power to vote and direct
the disposition of the Shares held by Centennial IV.
FEP VI has the direct power to direct the disposition of and vote
the Shares held by it. By virtue of the relationships described in Item 2, each
of FGRII, FGR, FPEC, FFGI, SCIV and Messrs. Van Degna and Gorgi may be deemed to
have the indirect power to vote and direct the disposition of the Shares held by
FEP VI.
FVR has the direct power to direct the disposition of and vote the
Shares held by it. By virtue of the relationships described in Item 2, each of
FPEC, FFGI and Messrs. Van Degna and Gorgi may be deemed to have the indirect
power to vote and direct the disposition of the Shares held by FVR.
CP has the direct power to direct the disposition of and vote the
Shares held by it. By virtue of the relationships described in Item 2, each of
SLP, SCII and Messrs. Van Degna and Gorgi may be deemed to have the indirect
power to vote and direct the disposition of the Shares held by CP.
Saugatuck III has the direct power to direct the disposition of and
vote the Shares held by it. By virtue of the relationships described in Item 2,
Greyrock may be deemed to have the indirect power to vote and direct the
disposition of the Shares held by Saugatuck III.
PNCCC has the direct power to direct the disposition of and vote the
Shares held by it. By virtue of the relationships described in Item 2, PNCHC
and PNCBC may be deemed to have the indirect power to vote and direct the
disposition of the Shares held by PNCCC.
Primus III has the direct power to direct the disposition of and
vote the Shares held by it. By virtue of the relationships described in Item 2,
Primus Venture III and Primus may be deemed to have the indirect power to vote
and direct the disposition of the Shares held by Primus III.
The Reporting Persons understand that Messrs. Schutz and Van Degna
each has the power to vote the Shares held by him, and the power to direct the
disposition of vested the Shares held by him. Under the restrictions applicable
to such Shares, unvested Shares are not transferable. The Reporting Persons
understand that Messrs. McGinty and Bartlett each has the power to vote and
direct the disposition of the Shares that he holds.
(c) None of the Reporting Persons or any of the Officers and
Partners have effected any transaction in the Shares during the past 60 days.
(d) Each of the Stockholders has the right to receive and the
power to direct the receipt of dividends from, and proceeds from the sale of,
the Shares held by it.
The Reporting Persons understand that Messrs. Schutz, Van Degna,
McGinty and Bartlett each has the right to receive and the power to direct to
receipt of, dividends from, and the proceeds from the sale of, the Shares held
by him. In Mr. Schutz s case, such power is subject to his agreements with
Centennial IV.
(e) Not applicable.
Item 6. Contracts, Arrangements, Understandings or Relationships With
Respect to Securities of the Issuer.
The information included under the third paragraph of Item 4 of this
Statement is hereby incorporated in its entirety by this reference.
Pursuant to a Purchase Agreement dated as of June 21, 1995, among
each of the Stockholders and the Company, as amended December 12, 1995 (the
Purchase Agreement ), the Stockholders acquired certain securities of the
Company and the Company agreed, among other things, (i) to provide the
Stockholders with certain inspection and information rights, (ii) comply with
certain covenants, and (iii) reimburse the Stockholders for certain expenses.
The foregoing summary of the Purchase Agreement is qualified in its entirety by
reference to the Purchase Agreement attached as Exhibits 3 and 4 to this
Statement.
Pursuant to a Registration Rights Agreement dated as of June 21,
1995, among each of the Stockholders, the Company and certain other persons, as
amended (the Registration Rights Agreement ), the Stockholders have the right
to exercise certain demand and piggyback registration rights with respect to,
and, subject to certain restrictions, the Company is required to register, the
Shares owned by the Stockholders. The foregoing summary of the Registration
Rights Agreement is qualified in its entirety by reference to the Registration
Rights Agreement attached as Exhibit 5 to this Statement.
Pursuant to a Stockholders Agreement dated as of June 21, 1995 among
each of the Stockholders, the Company and certain other persons (the
Stockholders Agreement ), the Stockholders agreed to certain holdback
restrictions in connection with their sale of Shares. The foregoing summary of
the Stockholders Agreement is qualified in its entirety by reference to the
Stockholders Agreement attached as Exhibit 6 to this Statement.
Other than set forth above, neither any of the Reporting Persons nor
any of the Officers and Partners has any contract, arrangement, understanding or
relationship (legal or otherwise) with any person with respect to securities of
the Company, including, but not limited to, transfer or voting of any such
securities, finder's fees, joint ventures, loans or option arrangements, puts or
calls, guarantees of profits, division of profits or losses, or the giving or
withholding of proxies.
Item 7. Material to be Filed as Exhibits.
Exhibit 1. Term Sheet dated April 9, 1997 among Centennial Fund IV,
L.P., Fleet Equity Partners VI, L.P., Saugatuck Capital Company
Limited Partnership III, PNC Capital Corp., Primus Capital Fund III
limited partnership, and Preferred Networks, Inc., incorporated by
reference to Exhibit 10.31 to Preferred Networks, Inc. s Annual
Report on Form 10-K for the year ended December 31, 1996.
Exhibit 2. Form of Director s Restricted Stock Award Agreement
between Preferred Networks, Inc. and each of Jeffrey Schutz and
Robert Van Degna.
Exhibit 3. Purchase Agreement dated June 21, 1995 among Centennial
Fund IV, L.P., Fleet Equity Partners VI, L.P., Fleet Venture
Resources, Inc., Chisholm Partners II, L.P., Saugatuck Capital
Company Limited Partnership III, PNC Capital Corp., Primus Capital
Fund III Limited Partnership and Preferred Networks, Inc.,
incorporated by reference to Exhibit 10.6 to Preferred Networks,
Inc. s Registration Statement on Form S-1 (No. 33-80507).
Exhibit 4. Amendment dated December 12, 1995 to Purchase Agreement
dated June 21, 1995 among Centennial Fund IV, L.P., Fleet Equity
Partners VI, L.P., Fleet Venture Resources, Inc., Chisholm Partners
II, L.P., Saugatuck Capital Company Limited Partnership III, PNC
Capital Corp., Primus Capital Fund III Limited Partnership and
Preferred Networks, Inc.
Exhibit 5. Stockholders Agreement dated June 21, 1995 among
Centennial Fund IV, L.P., Fleet Equity Partners VI, L.P., Fleet
Venture Resources, Inc., Chisholm Partners II, L.P., Saugatuck
Capital Company Limited Partnership III, PNC Capital Corp., Primus
Capital Fund III limited partnership, Preferred Networks, Inc., and
certain other persons, incorporated by reference to Exhibit 10.7 to
Preferred Networks, Inc. s Registration Statement on Form S-1 (No.
33-80507).
Exhibit 6. Registration Rights Agreement dated June 21, 1995 among
Centennial Fund IV, L.P., Fleet Equity Partners VI, L.P., Fleet
Venture Resources, Inc., Chisholm Partners II, L.P., Saugatuck
Capital Company Limited Partnership III, PNC Capital Corp., Primus
Capital Fund III limited partnership, Preferred Networks, Inc., and
certain other persons, incorporated by reference to Exhibit 10.8 to
Preferred Networks, Inc. s Registration Statement on Form S-1 (No.
33-80507).
Exhibit 7. Joint Filing Agreement among Centennial Fund IV, L.P.,
Fleet Equity Partners VI, L.P., Saugatuck Capital Company Limited
Partnership III, PNC Capital Corp., Primus Capital Fund III limited
partnership.
Signature
After reasonable inquiry and to the best of my knowledge and belief,
I certify that the information set forth in this Statement is true, complete and
correct.
Date: April 21, 1997
Jeffrey Schutz, as general partner of Centennial
Holdings IV, L.P., general partner of Centennial Fund
IV, L.P.
Date: April 21, 1997
Robert Van Degna, individually and as Chairman and Chief
Executive Officer of Fleet Growth Resources II, Inc.,
general partner of Fleet Equity Partners VI, L.P.; as
Chairman and Chief Executive Officer of Silverado II
Corp., general partner of Silverado II, L.P., general
partner of Chisholm Partners II, L.P.; and as Chairman
and Chief Executive Officer of Fleet Growth Resources,
Inc., Fleet Venture Resources, Inc., Fleet Private
Equity Co., Inc. and Silverado IV Corp.
Date: April 21, 1997
William C. Mutterperl, Senior Vice President, Secretary
and General Counsel of Fleet Financial Group, Inc.
Date: April 21, 1997
Habib Y. Gorgi, individually
Date: April 21, 1997
Richard P. Campbell, Jr., as general partner of Greyrock
Partners, general partner of Saugatuck Capital Company
Limited Partnership III
Date: April 21, 1997
Steve Rothman, Managing Director and Chief Financial
Officer of Primus Venture Partners, Inc., general
partner of Primus Venture Partners III Limited
Partnership, general partner of Primus Capital Fund III
limited partnership
Date: April 21, 1997
David McL. Hillman, Executive Vice President and
Principal of PNC Capital Corp.
___________________________
Robert L. Haunschild, Chairman and President of
PNC Holding Corp.
_________________________
Robert L. Haunschild, Senior Vice President and Chief
Financial Officer of PNC Bank Corp.
SCHEDULE A
Set forth below are the names and present principal occupations of each of
the executive officers and directors of FPEC, FVR, FGR, FGRII, SCII, SCIV, and
FFGI. Except as otherwise set forth below, the principal business address of
each such person is 50 Kennedy Plaza, Providence, Rhode Island 02903.
I. Directors and Executive Officers of FPEC, FVR, FGR, FGRII.
(A) Directors Principal Occupation
Robert M. Van Degna Chairman and CEO, FPEC
Habib Y. Gorgi President, FPEC
H. Jay Sarles Vice Chairman, FFGI
Brian T. Moynihan Vice President, FFGI
Douglas L. Jacobs Vice President, FFGI
(B) Executive Officers Principal Occupation
Robert M. Van Degna Chairman and CEO, FPEC
Habib Y. Gorgi President, FPEC
Michael A. Gorman Senior Vice President, FPEC
Thadeus J. Mocarski Senior Vice President, FPEC
Riordon B. Smith Senior Vice President, FPEC
Cynthia L. Balasco Vice President, Assistant Secretary, Controller
and CFO, FPEC
II. Directors and Executive Officers of SCII and SCIV.
(A) Directors Principal Occupation
Robert M. Van Degna Chairman and CEO, FPEC
Habib Y. Gorgi President, FPEC
(B) EXECUTIVE OFFICERS PRINCIPAL OCCUPATION
Robert M. Van Degna Chairman and CEO, FPEC
Habib Y. Gorgi President, FPEC
Michael A. Gorman Senior Vice President, FPEC
Thadeus J. Mocarski Senior Vice President, FPEC
Riordon B. Smith Senior Vice President, FPEC
Cynthia L. Balasco Vice President, Assistant Secretary, Controller
and CFO, FPEC
III. Directors and Executive Officers of FFGI.
(A) Directors Principal Occupation/Address
Joel B. Alvord Retired Chairman, Fleet Financial Group, Inc.
1 Federal Street
Boston, MA 02110
William Barnet, III President and CEO, William Barnet & Son, Inc.
P. O. Box 131
1300 Hayne Street
Arcadia, SC 20320
Bradford R. Boss Chairman, A.T. Cross Company
One Albion Road
Lincoln, RI 02865
Stillman B. Brown President, Harcott Corporation
196 Trumball Street, 4th Floor
Hartford, CT 06103
Paul J. Choquette, Jr. President, Gilbane Building Company
Seven Jackson Walkway
Providence, RI 02940
John T. Collins Chairman and CEO, The Collins Group, Inc.
Two International Place, Floor 27
Boston, MA 02110
Bernard M. Fox Chairman, President and CEO, Northeast
Utilities
P. O. Box 270
Hartford, CT 06141
James F. Hardymon Chairman and CEO, Textron, Inc.
40 Westminster Street
Providence, RI 02903
Robert M. Kavner Managing Director, Kavner & Associates
9830 Wilshire Boulevard
Beverly Hills, CA 90212
Raymond C. Kennedy Chairman, Kendell Holdings, Inc.
745 Warren Street
Hudson, NY 12534
Robert J. Matura Chairman and CEO, Robert J. Matura Associates
84 Lynam Road
Stamford, CT 06903
Arthur C. Milot Private Investor
P. O. Box 456
Jamestown, RI 02835
Terrence Murray Chairman, President and CEO, Fleet Financial
Group, Inc.
1 Federal Street
Boston, MA 02110
Thomas D. O Connor, Sr. Chairman and CEO, Mohawk Paper Mills, Inc.
465 Saratoga Street
P. O. Box 497
Cohoes, NY 12047
Michael B. Picotte Managing General Partner and CEO, The Picotte
Companies
20 Corporate Woods Boulevard, Suite 600
Albany, NY 12211
(A) Directors Principal Occupation/Address
Lois D. Rice Guest Scholar, Program in Economic Studies
Brookings Institution
2332 Massachusetts Avenue, N.W.
Washington, DC 20008
John R. Riedman Chairman, Riedman Corp.
Riedman Tower
45 East Avenue
Rochester, NY 14604
John S. Scott Retired Chairman, Richardson-Vicks, Inc.
1191 Smith Ridge Road
New Canaan, CT 06840
Samuel O. Thier CEO, Partners Healthcare System, Inc.
Prudential Tower - 11th Floor
800 Boylston Street
Boston, MA 02199
Paul R. Tregurtha Chairman and CEO, Mormac Marine Group, Inc.
Three Landmark Square
Stamford, CT 06901
(B) Executive Officers Principal Occupation/Business Address
Robert J. Higgins Vice Chairman
Fleet Financial Group, Inc.
Douglas L. Jacobs Treasurer
Fleet Financial Group, Inc.
75 State Street
Boston, MA
Robert C. Lamb, Jr. Controller and Chief Accounting Officer
Fleet Financial Group, Inc.
Eugene M. McQuade Executive Vice President and CFO
Fleet Financial Group, Inc.
1 Federal Street
Boston, MA 02110
Terrence Murray Chairman, President and CEO
Fleet Financial Group, Inc.
1 Federal Street
Boston, MA 02110
William C. Mutterperl Senior Vice President, Secretary and General
Counsel
Fleet Financial Group, Inc.
1 Federal Street
Boston, MA 02110
Gunnar S. Overstrom, Jr. Vice Chairman
Fleet Financial Group, Inc.
777 Main Street
Hartford, CT 06115
H. Jay Sarles Vice Chairman
Fleet Financial Group, Inc.
1 Federal Street
Boston, MA 02100
Michael R. Zucchini Vice Chairman
Fleet Financial Group, Inc.
SCHEDULE B
Set forth below are the names and present principal occupations of each of
the executive officers and directors of PHC Holding Corp., PNC Capital Corp.,
and PNC Bank Corp. All of the persons listed below are United States citizens.
I. DIRECTORS AND EXECUTIVE OFFICERS OF PNC HOLDING CORP.:
(A) Directors Principal Occupation/Address
Robert L. Haunschild Senior Vice President,
Chief Executive Officer
PNC Bank Corp.
One PNC Plaza
249 Fifth Avenue
Pittsburgh, PA 15222-2707
Michelle L. Petrilli Chief Market Counsel
PNC Bank, Delaware
222 Delaware Avenue, 18th Floor
Wilmington, DE 19801
Henry A. Vogt Senior Vice President,
Chief Credit Policy Officer
PNC Bank, Delaware
222 Delaware Avenue
Wilmington, DE 19899
(B) OFFICERS PRINCIPAL OCCUPATION/ADDRESS
John S. Fioravanti Treasurer
PNC Funding Corp.
Broad & Chestnut Streets
19th Floor
Philadelphia, PA 19110
Maria C. Schaffer Controller
PNC Capital Corp.
One PNC Plaza, 19th Floor
Pittsburgh, PA 15265
Robert L. Haunschild Chairman and President
PNC Equity Management Corp.
One PNC Plaza
249 Fifth Avenue
Pittsburgh, PA 15222-2707
Michelle L. Petrilli Secretary
Chief Market Counsel
PNC Bank, Delaware
222 Delaware Avenue, 18th Floor
Wilmington, DE 19801
II. DIRECTORS AND EXECUTIVE OFFICERS OF PNC CAPITAL CORP.:
(A) Directors Principal Occupation/Address
Robert L. Haunschild Executive Vice President
PNC Equity Management Corp.
One PNC Plaza
249 Fifth Avenue
Pittsburgh, PA 15222-2707
David McL. Hillman Executive Vice President
PNC Equity Management Corp.
One PNC Plaza
249 Fifth Avenue
Pittsburgh, PA 15222-2707
Donald H. Jones Chairman
Industry.net
639 Alpha Drive
Pittsburgh, PA 15238
Robert C. Milsom Retired
PNC Bank, N.A.
One PNC Plaza, Suite 2310
Fifth Avenue and Wood Street
Pittsburgh, PA 15265
Michelle L. Petrilli Chief Market Counsel
PNC Bank, Delaware
222 Delaware Avenue, 18th Floor
Wilmington, DE 19801
Konrad M. Weis Retired
Bayer Corporation
500 Grant Street
One Mellon Center
Pittsburgh, PA 15219-2502
Gary J. Zentner President
PNC Equity Management Corp.
One PNC Plaza, 19th Floor
249 Fifth Avenue
Pittsburgh, PA 15222-2707
(B) OFFICERS
John S. Fioranvanti Treasurer
PNC Funding Corp.
Broad & Chestnut Streets
19th Floor
Philadelphia, PA 19110
Maria C. Schaffer Controller
PNC Capital Corp.
19th Floor
Pittsburgh, PA 15265
Michelle L. Petrilli Secretary
Chief Market Counsel
PNC Bank, Delaware
222 Delaware Avenue, 18th Floor
Wilmington, DE 19801
Gary J. Zentner President
PNC Equity Management Corp.
One PNC Plaza, 19th Floor
249 Fifth Avenue
III. DIRECTORS AND EXECUTIVE OFFICERS OF PNC BANK CORP.:
(A) Directors Principal Occupation/Address
Paul W. Chellgren Chairman and Chief Executive Officer
Ashland Inc.
P. O. Box 391
Ashland, KY 41114
Robert N. Clay President and Chief Executive Officer
Clay Holding Company
Three Chimneys Farm
Versailles, KY 40383
George A. Davidson, Jr. Chairman and Chief Executive Officer
Consolidated Natural Gas Company
CNG Tower, 625 Liberty Avenue
Pittsburgh, PA 15222-3199
David F. Girard-diCarlo Managing Partner
Blank Rome Comisky & McCauley
Four Penn Center Plaza
Philadelphia, PA 19103
Dianna L. Green Senior Vice President, Customer
Operations
Duquesne Light Company
411 7th Avenue - 16th Floor
Pittsburgh, PA 15219
Carl G. Grefenstette Chairman and Chief Executive Officer
The Hillman Company
2000 Grant Building
Pittsburgh, PA 15219
Arthur J. Kania Principal
Trikan Associates
Two Bala Cynwyd Plaza, Suite 525
Bala Cynwyd, PA 19004
Bruce C. Lindsay Chairman and Managing Director
Brind-Lindsay & Co., Inc.
1520 Locust Street, Suite 1100
Philadelphia, PA 19102
Thomas Marshall Thomas Marshall Foundation
600 Grant Street, Suite 1080
Pittsburgh, PA 15219-2704
W. Craig McClelland Chairman and Chief Executive Officer
Union Camp Corporation
1600 Valley Road
Wayne, NJ 07470
Donald I. Moritz Chairman of the Executive Committee
Equitable Resources, Inc.
420 Boulevard of the Allies
Pittsburgh, PA 15219
Thomas H. O Brien Chairman and Chief Executive Officer
PNC Bank Corp.
One PNC Plaza, 249 Fifth Avenue
Pittsburgh, PA 15222-2707
Jackson H. Randolph Chairman
Cinergy Corp.
221 East Fourth Street, Suite 3004
Cincinnati, OH 45202
James E. Rohr President
PNC Bank, N.A.
One PNC Plaza, 30th Floor
Pittsburgh, PA 15265
Roderic H. Rose Chairman and Chief Executive Officer
Keystone State Life Insurance Co.
1401 Walnut Street, 10th Floor
Philadelphia, PA 19102-3122
Vincent A. Sarni Retired Chairman and Chief Executive
officer
PPG Industries, Inc.
One PPG Place
Pittsburgh, PA 15272
Garry J. Scheuring Retired Vice Chairman
PNC Bank Corp.
Two Tower Center
East Brunswick, NJ 08816-1100
Richard P. Simmons Chairman, President and
Chief Executive Officer
Allegheny Teledyne Incorporated
1000 Six PPG Place
Pittsburgh, PA 15222-5479
Thomas J. Usher Chairman and Chief Executive Officer
USX Corporation
600 Grant Street, Room 6170
Pittsburgh, PA 15219-4776
Milton A. Washington President and Chief Executive Officer
AHRCO
5604 Baum Boulevard
Pittsburgh, PA 15206
Helge H. Wehmeier President and Chief Executive Officer
Bayer Corporation
500 Grant Street, Suite 5300
Pittsburgh, PA 15219-2507
(B) OFFICERS
Robert L. Haunschild Senior Vice President
Chief Financial Officer
PNC Bank Corp.
One PNC Plaza
249 Fifth Avenue
Pittsburgh, PA 15222-2707
William F. Strome Senior Vice President and
Corporate Secretary
One PNC Plaza
249 Fifth Avenue
Pittsburgh, PA 15222-2707
James E. Rohr President
PNC Bank, N.A.
One PNC Plaza, 30th Floor
Pittsburgh, PA 15265
Thomas H. O Brien Chairman and CEO
PNC Bank, N.A.
One PNC Plaza, 30th Floor
Pittsburgh, PA 15265<PAGE>
Exhibit 2
DIRECTOR'S RESTRICTED STOCK AWARD AGREEMENT
1996 AWARD
This is an Agreement dated April 15, 1996 between Preferred Networks,
Inc. ("PNI"), a Delaware corporation, and Jeffrey H. Schutz
(the "Outside Director").
Background
The PNI 1995 Non-Employee Directors Restricted Stock Award Plan (the
"Plan") provides for the grant of shares of PNI Common Stock ("Common Stock"),
subject to certain restrictions, as compensation for service as a director to
each director of PNI who is not an officer or employee of PNI. Pursuant to
such Plan, the Outside Director is entitled to this Award with respect to his
services as a director of PNI.
Agreement
The parties hereto do hereby agree as follows:
1. Award. Pursuant to the Plan, the Outside Director is awarded 15,000
shares of Common Stock (the "Shares") as compensation for the Outside Director s
services as a director of PNI, subject to the terms of the Plan and this
Agreement.
2. Restrictions. The Shares are subject to the restrictions prescribed
in the Plan and some or all of the Shares must be transferred back to PNI for no
consideration under certain circumstances as set forth in the Plan if the
Outside Director ceases to be a director of PNI for any reason at any time prior
to the 2001 Annual Meeting of PNI's Shareholders.
3. Certificates. The certificate or certificates representing the
Shares shall be legended to reflect the applicable restrictions and shall be
held by the Secretary of PNI as long as such restrictions have not expired.
4. No 83(b) Election. The Outside Director shall not file an election
under Section 83(b) of the Internal Revenue Code of 1986 with respect to this
Award.
5. No Transfer. The Outside Director shall not transfer the Shares or
any interest therein prior to the lapse of restrictions on the Shares pursuant
to the Plan.
6. Award Subject to Plan. This Award and the Shares are subject to
all of the other terms and conditions of the Plan.
Executed the day and year first above written.
PREFERRED NETWORKS, INC.
By:____________________________________
Mark H. Dunaway, Chairman
and Chief Executive Officer
OUTSIDE DIRECTOR
_______________________________________
(Signature of Outside Director)
AMENDMENT NO. 1 TO PURCHASE AGREEMENT
THIS AMENDMENT NO. 1 TO PURCHASE AGREEMENT (this "Amendment") dated as of
December 12, 1995, is by and among PREFERRED NETWORKS, INC., a Delaware
corporation (the "Company") and each of the Persons listed as a Purchaser on the
signature pages to this Amendment (referred to herein collectively as the
"Purchasers" and individually as a "Purchaser").
RECITALS:
WHEREAS, the Company and the Purchasers have entered into a Purchase
Agreement dated as of June 21, 1995 (the "Purchase Agreement") with respect to
the acquisitions by the Purchasers of shares of Series B Convertible Preferred
Stock of the Corporation;
WHEREAS, the Company and the Purchasers desire to amend the Purchase
Agreement in certain respects as provided herein.
STATEMENT OF AMENDMENT:
NOW, THEREFORE, in consideration of the premises, the mutual covenants and
agreements of the parties herein and in the Purchase Agreement, and other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. Defined Terms. Capitalized terms not defined in this Agreement are
used as defined in the Purchase Agreement.
2. Deletion of Certain Provisions. The following provisions of the
Purchase Agreement, and references thereto, shall be deleted from the Purchase
Agreement upon completion of the "Qualified Senior Public Offering" currently
contemplated by the Company, as such term is defined in the Company's
Certificate of Incorporation as the same may hereafter be amended (the
"Certificate of Incorporation"), and all references to a "Qualified Public
Offering" as defined in the Purchase Agreement shall be deemed to be references
to a "Qualified Senior Public Offering" as defined in the Certificate of
Incorporation:
(a) Section 3A (delivery of financial information), except to the
extent necessary for each SBIC Holder to comply with applicable law;
(b) Section 3C (attendance at board meetings);
(c) Section 3D (restrictions);
(d) Section 3E (affirmative covenants);
(e) Section 3F (underlying common stock and warrant covenants);
and
(f) Section 3K (public disclosure).
3. Public Disclosures. Notwithstanding the provisions of Section 3K of
the Purchase Agreement, the Purchasers may be listed as stockholders in any
registration statements or report filed with the Securities and Exchange
Commission or any state securities commission and the transactions with the
Purchasers contemplated by the Purchase Agreement may be described therein
without prior review or approval by the Purchasers.
4. FCC Matters. The Company hereby represents that on December 11,
1995, it filed an application with the FCC to obtain FCC Approval as
contemplated by Section 3M(i) of the Purchase Agreement. Section 3M(i) of the
Purchase Agreement (requiring FCC approval by September 30, 1995) is hereby
deleted from the Purchase Agreement, and the Purchasers hereby waive any rights
they have arising out of the failure of the Company to have complied previously
with Section 3M(i) on a timely basis.
5. General. Except as hereby amended, all the terms and provisions of
the Purchase Agreement shall continue in full force and effect.
6. Counterparts. This Amendment may be executed by each party upon a
separate copy, and in such case one counterpart of this Amendment shall consist
of enough of such copies to reflect the signatures of all of the parties. This
Amendment may be executed in two or more counterparts, each of which shall be an
original, and each of which shall constitute one and the same amendment. Any
party may deliver an executed copy of this Amendment by facsimile transmission
to the other parties and such delivery shall have the same force and effect as
delivery of a manually signed copy of this Amendment.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first set forth above.
Exhibit 7 -- Joint Filing Agreement
In accordance with Rule 13d-1(f) under the Securities Exchange Act
of 1934, as amended, the undersigned hereby (I) agree to the joint filing with
all other Reporting Persons (as such term is defined the statement on Schedule
13D described below) on behalf of each of them of a statement on Schedule 13D
(including amendments thereto) with respect to the Common Stock, par value
$.0001 per share, of Preferred Networks, Inc. and (ii) agree that this
Agreement be included as an Exhibit to such joint filing. This Agreement may be
executed in any number of counterparts all of which taken together shall
constitute one and the same instrument. In witness whereof, the undersigned
hereby execute this Agreement as of the 21st day of April, 1997.
Date: April 21, 1997
Jeffrey Schutz, as general partner of Centennial
Holdings IV, L.P., general partner of Centennial Fund
IV, L.P.
Date: April 21, 1997
Robert Van Degna, individually and as Chairman and Chief
Executive Officer of Fleet Growth Resources II, Inc.,
general partner of Fleet Equity Partners VI, L.P.; as
Chairman and Chief Executive Officer of Silverado II
Corp., general partner of Silverado II, L.P., general
partner of Chisholm Partners II, L.P.; and as Chairman
and Chief Executive Officer of Fleet Growth Resources,
Inc., Fleet Venture Resources, Inc., Fleet Private
Equity Co., Inc. and Silverado IV Corp.
Date: April 21, 1997
William C. Mutterperl, Senior Vice President, Secretary
and General Counsel of Fleet Financial Group, Inc.
Date: April 21, 1997
Habib Y. Gorgi, individually
Date: April 21, 1997
Richard P. Campbell, Jr., as general partner of Greyrock
Partners, general partner of Saugatuck Capital Company
Limited Partnership III
Date: April 21, 1997
Steve Rothman, Managing Director and Chief Financial
Officer of Primus Venture Partners, Inc., general
partner of Primus Venture Partners III Limited
Partnership, general partner of Primus Capital Fund III
limited partnership
Date: April 21, 1997
David McL. Hillman, Executive Vice President and
Principal of PNC Capital Corp.
Date: April 21, 1997
Robert L. Haunschild, Chairman and President of
PNC Holding Corp.
Date: April 21, 1997
Robert L. Haunschild, Senior Vice President and Chief
Financial Officer of PNC Bank Corp.
